A Neveda contractor shares what has made its team so succesfuly going through the motions of trial and error.



Stitser Drywall is one of northern Nevada's largest and most successful wall and ceiling contracting firms. Several years ago, the firm handled more commercial business revenues than it does now. But big contracts often brought big headaches--and general contractors who were notoriously slow at paying their subcontractors.

Technically, it is a dual company, consisting of Stitser Drywall and Pinnacle Drywall & Stucco Inc., which handles residential work. For all intents and purposes, the two firms operate as one by sharing suppliers, offices in Sparks, Nev., and some office staff.

Conrad Stitser, entrepreneur and owner of Stitser Drywall and co-owner of Pinnacle Drywall, wanted to work with the right GCs--the ones who paid their bills and structured efficient job sites. He also wanted to improve operations without compromising work quality or the directive of using top-quality materials.

"I have some great guys working for me, a lot of energetic guys who bring something to the table," says Stitser.

Beginning in 1997, Vice President and CFO Doug Webber urged company officials to think differently. He suggested that estimators and field supervisors think more in terms of project profitability, and that paved the way for a major corporate restructuring.

"We set up a plan to work with quality GCs who pay their bills on time, get their jobs performed and know how to close out a job," says Webber. "Also, we began to contract our business by going after $50,000 to $500,000 jobs."

Good people

To achieve the new goals, Stitser Drywall cut overhead by consolidating some office positions, boosting in-field supervision and developing better project accounting. Even though sales have decreased, profitability is up and cash flow has significantly improved.

"Change is never easy, and some of the people on the team resisted it," says Stitser. "But we all knew restructuring the company was the right thing to do."

Nowadays, company officials have an altogether different view. Instead of taking any and all projects, estimators bid only the desirable jobs.

"We may be turning down a bid here and there," says Senior Estimator and Project Manager Steve Talafuse. "But it's a much better strategy."

Although Reno is booming, expansion carries both pluses and minuses. The minuses seem daunting, as unemployment for Washoe County has been very low?less than both the Nevada average and national figures.

Making matters worse is the problem of competition. At least five drywall firms, mainly non-union shops, have migrated to town in recent years. They place a squeeze on bid acceptances and test Stitser's workforce loyalty. Stitser Drywall is a union shop and sometimes finds it difficult to compete with non-union firms, which represent the majority of competitors in northern Nevada.

Stitser responded by restructuring its compensation plan. Webber, whose background includes financial analysis and a position as corporate controller, prepared a new compensation program, which helped the company to be more competitive in the marketplace. It features a retirement plan and incentives to reward employees at all levels of the company, including office staff and field foremen.

At the same time, Stitser worked hard at nurturing employees. Keeping them in the fold, however, hasn't always been easy.

"We lost one of my top foreman a couple of years ago, and it hurt. But, you know, he eventually came back," says Stitser. "That's because we try to fulfill everything we promise. Honesty and sincerity mean a lot in the long run?a lot more than a pay raise."

"It's not a lot different from building a winning football team," adds Stitser. "You work at retaining good guys, and you try to get good recruits. I think it's a combination of providing good jobs and paying people fairly. But you also have to talk to them, visit with them and give them plenty of 'that-a-boy's'?both verbally and financially."

Stitser recently offered Webber and Talafuse ownership in the company. Webber will continue to oversee the business side of the firm, while Talafuse will focus on its operations.

A lot of Stitser's success hinges on partnerships with quality-minded materials manufacturers and suppliers. The right materials maintain profits and, at times, can even boost project returns.

His drywall of choice is Next Generation Sheetrock Gypsum Panels. Stitser says that the new panels have helped reduce per-job labor costs by 5 to 10 percent. Even seemingly minor steps, such as screwing the board to metal framing, can be done faster and with greater consistency using the new gypsum board, according to Stitser. He says the Sheetrock's cores allow fasteners to screw in flush board after board, without workers' having to stop and adjust their screw gun settings.

"Our crews are in and out of buildings faster," Stitser says. "Their attitudes are elevated."

The right stuff

Another feature of Stitser Drywall's success lies in its production innovations. The Silver Creek multifamily development in Reno has 29 buildings and 400 total units. Here, crews used Hitachi 1 3/4-inch coil nailers to plow through mountains of weather-resistant USG Gyp-Lap Gypsum Sheathing. After about three weeks on the job, Stitser crews began to catch up to the framers on newly started units. Clearly, the production and technological edge is one reason Stitser received the $3.2 million Silver Creek wall contract.

"It's huge," says Stitser. "We saved at least 20 percent in labor overall."

Similarly, upper-end homes in Reno's new Tapestry subdivision went up fast, partly because crews hung 1/2-inch Sheetrock Interior Gypsum Ceiling Board. The 1/2-inch board features a special gypsum core that increases sag-resistance. The 1/2-inch board features a special gypsum cove that increases sag resistance and weighs significantly less than 5/8-inch board, lightening the loads placed on Stitser's two-man residential crews and stimulating productivity. The hangers are paid piecework, and lightweight panels enabled them to finish work faster each day.

In the quest to improve field supervision, Stitser hired Mike Osborn. A veteran of wall construction who got his start in the late 1960s, Osborn serves as Stitser's company-wide field superintendent for commercial projects. But his true value lies in the many time-saving techniques he has woven into operations.

At the Riverside Hotel, for example, Stitser crews hung 4-foot-by-9-foot 5/8-inch Sheetrock panels over metal framing. The job was a retrofit of Reno's oldest hotel, turning a vintage building into artist loft apartments. Here, crew organization proved to be a real time saver. One crew did the metal framing layout, focusing solely on fastening bottom track with powder-actuated concrete nailers. Then, a second crew took over, using laser-guided electronic plumbs and chalk markers to install top metal track. A third crew installed the metal studs.

"We've found this type of system allows us to get into the real flow of things. We have no loose ends, and the equipment saves us a lot of money," says Osborn, who manages seven field supervisors. "When we put an order in for metal, we consider the height differences between slabs, which varies by floor. We also try to arrange our schedule so the GC won't schedule other trades that could get in the way."

People business

Reno is perhaps most famous for its old silver mines, but lately the casinos have taken over the role of main attraction. Dozens of ski resorts surround nearby Lake Tahoe and lie within a 60-minute drive. Hunting and fishing destinations abound.

How interesting that Reno, one of America's best-positioned cities, is also home to a well-positioned drywall company. In the end, however, it isn't market positioning that matters most. Stitser credits people with his company's success.

"One of the most important things we do is build solid relationships," says Stitser, who has service awards and plaques displayed throughout company offices. "Relationships help us negotiate successful jobs. Relationships with companies such as USG keep a steady flow of great product. Relationships keep us on the cutting edge. It's all about people. The strong management team put in place the last few years has added a level of sophistication, allowing the company to prosper."

Tricks with Joint Treatment

One of Stitser Drywall's veteran tapers says the key to great drywall joints lies in good techniques. Jeff Brown, who's been with the company for more than two decades, makes these recommendations for creating great finishes:

¿ Creamy mud is the best. It allows the taper to eliminate air bubbles and trowel an even finish.

¿ Use a 6-inch taping knife for wiping down initial joint compound coats. Wider knives are great on topcoats because they're more flexible and limber.

¿ Mechanical tools help with speed. Use a 7-inch mechanical tool (shown) to apply topcoats, and follow with a 12-inch tool for an ultra-smooth finish.

¿ Hide drywall screws. Use a 2-inch box to apply a topcoat and a 3-inch box for a finish coat. The small-size boxes do the job without crowning the walls.